Discounted Cash Flow (DCF) Analysis Unlevered

The Gap, Inc. (GPS)

$13.2

-0.21 (-1.57%)
All numbers are in Millions, Currency in USD
Stock DCF: -14.38 | 13.2 | overvalue

Operating Data

Year
A/P
2018
Actual
2019
Actual
2020
Actual
2021
Actual
2022
Actual
2023
Projected
2024
Projected
2025
Projected
2026
Projected
2027
Projected
Revenue 15,85516,58016,38313,80016,67017,020.7117,378.7917,744.4118,117.7218,498.88
Revenue (%)
EBITDA 2,0571,9731,131-4034901,082.391,105.161,128.411,152.151,176.39
EBITDA (%)
EBIT 1,4981,395574-910-97.02483.02493.19503.56514.16524.97
EBIT (%)
Depreciation 559578557507587.02599.37611.98624.85638651.42
Depreciation (%)

Balance Sheet Data

Year
A/P
2018
Actual
2019
Actual
2020
Actual
2021
Actual
2022
Actual
2023
Projected
2024
Projected
2025
Projected
2026
Projected
2027
Projected
Total Cash 1,7832,4551,6542,3988772,001.172,043.272,086.252,130.152,174.96
Total Cash (%)
Account Receivables 282282316363335.01342.06349.26356.61364.11371.77
Account Receivables (%)
Inventories 1,9972,1312,1562,4513,0182,535.182,588.522,642.982,698.582,755.35
Inventories (%)
Accounts Payable 1,1811,1261,1741,7431,9511,557.061,589.821,623.261,657.411,692.28
Accounts Payable (%)
Capital Expenditure -731-705-1,045-392-753.56-769.41-785.60-802.13-819-836.23
Capital Expenditure (%)

Weighted Average Cost Of Capital

Share price $ 13.2
Beta 1.888
Diluted Shares Outstanding 383
Cost of Debt
Tax Rate 20.74
After-tax Cost of Debt 1.13%
Risk-Free Rate
Market Risk Premium
Cost of Equity 12.428
Total Debt 11,752
Total Equity 5,055.60
Total Capital 16,807.60
Debt Weighting 69.92
Equity Weighting 30.08
Wacc

Build Up Free Cash

Year
A/P
2018
Actual
2019
Actual
2020
Actual
2021
Actual
2022
Actual
2023
Projected
2024
Projected
2025
Projected
2026
Projected
2027
Projected
Revenue 15,85516,58016,38313,80016,67017,020.7117,378.7917,744.4118,117.7218,498.88
EBITDA 2,0571,9731,131-4034901,082.391,105.161,128.411,152.151,176.39
EBIT 1,4981,395574-910-97.02483.02493.19503.56514.16524.97
Tax Rate 40.45%24.13%33.52%39.66%20.74%31.70%31.70%31.70%31.70%31.70%
EBIAT 892.071,058.38381.58-549.14-76.89329.91336.85343.93351.17358.56
Depreciation 559578557507587.02599.37611.98624.85638651.42
Accounts Receivable -0-34-4727.99-7.05-7.20-7.35-7.50-7.66
Inventories --134-25-295-567482.82-53.34-54.46-55.60-56.77
Accounts Payable --5548569208-393.9432.7633.4534.1534.87
Capital Expenditure -731-705-1,045-392-753.56-769.41-785.60-802.13-819-836.23
UFCF 720.07742.39-117.42-207.14-574.45241.69135.45138.30141.21144.18
WACC
PV UFCF 231.22123.96121.09118.28115.53
SUM PV UFCF 710.07

Terminal Value

Growth in perpetuity method:
Long-term growth rate
WACC (%) 4.53
Free cash flow (t + 1) 147.06
Terminal Value 5,812.77
Present Value of Terminal Value 4,657.77

Intrinsic Value

Enterprise Value 5,367.85
Net Debt 10,875
Equity Value -5,507.15
Shares Outstanding 383
Equity Value Per Share -14.38